Introduction:
The Indian e-commerce sector is growing at a rapid pace; in particular, marketplaces like Myntra are changing how sellers view profitability. The new GT (Goods & Transport) Commission Module is presenting sellers with new challenges – especially in the areas of payment reconciliation and an understanding of commission.
In this blog, we are going to take you through:
- What is the GT Module
- The unit economics of commission and profitability
- Key differences between the old commission vs the new GT module
- Why payment reconciliation has never been more key for any seller
- How expert reconciliation can save a seller money and keep them compliant
Myntra GT Charges & New Commission Module – What Sellers Must Know:
Myntra rolled out a new Goods & Transport (GT) in its rate card. At first look, it appears as if GT charges will be charged to the customer; however, they are lost charges from the sellers before invoicing.
What is GT?
- GT stands for Goods & Transport charges.
- Myntra’s rate card says that GT should be paid by customers.
- In practice, the seller has paid for it, as it is netted down in the backend settlement.
Key Takeaways of the GT Module
- Not an Accounting Entry
- Sellers should not record GT charges in their books of accounts
- GT has no direct accounting implications; however, it affects the calculation of other deductions.
- TCS & TDS implications
- The computation of the base of TCS (Tax Collected at Source) & TDS (Tax Deducted at Source) has changed.
- Sellers need to adjust their tax booking processes for recording the GT module in a correct manner.
- GST preparation implications
- GST-related calculations are also different in the GT module.
- Since GT has been added before commission and logistics deductions, the sales tax liability is different, too.
- Commission & Logistics After GT
- The commission and logistics fees are now withheld after the GT deduction – this increases the burden on sellers.
- Marketing & Royalties
- These fees are also listed similarly in the new module, and sellers can continue to pay them as they did in the past system.
Takeaways for sellers: How to stay profitable
- Smart Pricing is Important
Since everything (commission, logistics, how tax will affect you now) is now connected to the GT, sellers must rework the pricing.
- Check your margins again.
Take in the GT deduction and run a new margin analysis with your product price.
- Tax Compliance Changes
Make sure you are doing your TCS, TDS, and GST calculations in line with the GT-based thinking.
- Keep your books clean.
Do not book the GT as either an expense or a liability. The GT has no accounting effect.
What appears to be a simple transition to the GT module is going to have a serious financial impact on Myntra sellers. Economy pricing should ease the risk of price erosion along with the change in compliance, but sellers still need to check their margins closely to make sure they are protecting their profits, avoiding mismatched tax calculations and payments.
Comparison between the old commission & New commission structure
- Commission & Logistics
Before GT:
Commission and logistics were calculated on the selling price/invoice price to the customer.
After GT:
Commission and logistics are now calculated on (MRP – Discounts – GT Charges) and effectively reduce seller payout.
- SJIT & Shipping Charges
Before GT:
Local and Zonal orders under SJIT were shipped free of cost.
After GT:
GT charges are applied, Myntra offers incentives of ₹27 (Local) and ₹22 (Zonal), but sellers still pay an additional amount of ₹50 – ₹70.
- Taxation
Before GT:
Tax was calculated easily as Invoice Price = Display Price, ensuring simple reconciliation.
After GT:
Tax is still calculated on the Invoice Price, but the Invoice ≠ Display Price. Customer pays ₹400, but the invoice shows ₹341, creating mismatches against GST, TCS, and TDS.
- CC Module (Flat Commission Sellers)
Before GT:
Sellers under CC (flat commission) only incurred fixed commission charges; there were no hidden deductions.
After GT:
GT charges are deducted from payout, increasing the seller’s Cost of Doing Business (CODB) for a CC seller.
| Module | MRP | Discount | Customer paid | GT | Invoice price | Taxable | Tax | Remarks |
| Before GT | 1,000 | 600 | 400 | – | 400 | 381 | 19 | Proper Tax collected and deposited to Govt |
| GT | 1,000 | 600 | 400 | 59 | 341 | 325 | 16 | Tax mismatch seen between customer paid & invoice |
Reconciliation findings between Old & New GT Module
- The Old Commission method was transparent and largely depended on account-to-account (out of the huge old group collections), whereas the GT commission is calculated by approach of category and price point, which can confuse the pricing stage, and sellers, at times, will apply incorrect pricing. This has made costing more difficult as well.
- In terms of comparison, the commission for everything under the top selling price points that are the same is higher in the new agreement, also the reverse logistics expenditure is nearly double the old module.
- Consequently, one good thing from this module is that GT is reversed at the time of return/RTO, thus providing some relief to sellers.
- However, since GT as a charge occurs before invoicing, it hits turnover as well as Average Item Selling Price (AISP) and ultimately bottom-line profitability.
- Data from a reconciliation study over 100 accounts shows that the Old Commission module displayed superior profits to the GT module, thus creating the following results: Commissions = Increased CODB = Cost of Doing Business and Reduced ITC = ITC Reserves.
To conclude, while the GT module offers some operational benefits overall, the bottom line or profitability is still much lower for the Seller than the Old Module.
How Payment Reconciliation Analyst play a vital role at the time of commission module change or rate card change
Payment Reconciliation is not merely a series of tasks, but rather an analytical skill and exercise that will be brought to bear on every Seller to ensure they have financial accuracy. The reconciliation process enables sellers to show them in total:
- All orders and payments
- Commissions taken
- Logistics and hidden charges (if any)
- Taxation reconciliation
- Returns reconciliation
- Profitability review
- SKU-wise analysis
After completing the reconciliation process in detail, we will provide sellers with a summary report documenting the following details of their transactions, including:
- Order status – Paid, Returned, or RTO
- Receivable vs. received balance payment from the e-commerce portal
- TCS & TDS need to match with the GST
Any identified gap in payments, our expert team will immediately follow up with the e-commerce portals to recover the outstanding amounts due to Sellers and help ensure sellers won’t lose revenue defined by our reconciliation.
Why Us?
Having specialized in payment reconciliation work for the last 10 years at MS ECOMMERCE ANALYSIS SERVICES PVT LTD (msanalysis.in), we have successfully worked with crews with top brands throughout India and overseas, providing them with trusted and timely reconciliation support.
???? Contact us
Phone: +91 9818958912
Email: beheratapas13@gmail.com
Website: msanalysis. in
With us, sellers will be at ease, stay compliant, and confident in their financials.
Few Examples of Reports: Graphical Representation for XYZ Company
Rate Cards for GT charges
Pic 1
Pic 2
Conclusion:
Payment reconciliation is also a crucial practice when assessing a business’s vitality and profitability, and is arguably even more important because it allows businesses to mitigate any losses and leakage of revenue.
It is important to conduct return reconciliation, too, because doing so gives sellers an opportunity to save their product costs via SPF (Seller Protection Fund) claims. If not reconciled properly, businesses can find themselves losing out on charges they did not even know existed, or on returned items they did not even claim, or on invoices that had erroneous commissions removed before payment.
In our analysis, we have found that the old commission model was extremely more profitable than the GT module. Nevertheless, as Myntra has made it compulsory for sellers to do business under the GT model, any seller working within this model should come up with insightful pricing strategies in order to sustain a viable cost base and to retain margin levels.
✅ Need help?
Our analytics team can support you with:
Smart Pricing Strategies
Payment reconciliation
Return reconciliation
Profitability review
FAQs
1. What is the Myntra GT Module?
The GT (Goods & Transport) Module is the new commission model by Myntra, in which sellers will see transport costs deducted before the invoicing process, even though it may look like it was paid by the customer.
2. What is different about the GT Module compared to the old commission model?
Previously, costs for commission/ logistics were calculated on the invoice price/selling price. Under GT, the cost is calculated on (MRP– Discounts – GT), which lowers the effective earnings of the seller.
3. Why is there a mismatch in the invoice price and the customer payment?
As the GT cost has been taken off before the invoice, a customer can pay ₹400 for an order, but the invoice will state ₹341, which may create a tax and accounting mismatch.
4. Are GT costs reversible?
Yes, IT can be reversed! This is a useful feature because GT costs are reversed when an order is returned or RTO (return to origin).
5. How does GT affect Cost Of Doing Business (CODB)?
It affects CODB as GT will increase it, as deductions will reduce payout, increase commissions, and reverse logistics are nearly 2fold compared to the old model.
6. What effect does GT have on your taxes?
So far as GST, TCS, and TDS reconciliation, it’s made things more complicated. Previously, these taxes reconciled back to the invoice and displayed amounts, whereas with GT, you had discrepancies in what your customers were paying and your seller invoices.
7. Why is reconciliation of payments especially pertinent after GT?
Reconciliation provides sellers a method of confirming accountability for commissions, supply chain/logistics, or taxes to sellers, and to recover dues from Myntra because it is extremely imprecise on the books when GT deductions have occurred.
8. Can pricing smartly help a seller mitigate the loss of GT payable?
Yes. Pricing smartly by considering actual price points, bringing footfall, paying attention to category, and being acutely aware of GT charges will help keep profitability in the seller’s favour.
9. Who can help with Myntra payment reconciliations (i.e., find out where your money went)?
Analyst specialists such as MS Ecommerce Analysis Services Pvt Ltd (msanalysis.in), for example, have successfully provided reconciliation to a high number of major brands over the past 10+ years, ensuring there are no undisclosed revenue leakages.
10. From a profitable perspective, is the GT module good?
No. Studies completed across 100+ accounts revealed that he old module provided a higher net profit. GT has increased the cost of doing business (CODB) through increased seller fees, decreased amounts payable to sellers, and a smaller input tax credit (ITC) reserve.
???? Contact us today to ensure your business stays profitable under the new GT model
MS ECOMMERCE ANALYSIS SERVICES PVT LTD
Delhi Branch, T-9818958912
Email : beheratapas13@gmail.com , support@msanalysis.in
Happy Selling